FTC settles anti-spyware software case

A Spokane man selling a software product called Spyware Assassin has agreed to pay $76,000 to settle a deceptive practices complaint filed by the Federal Trade Commission.

Thomas L. Delanoy, who operates MaxTheater Inc. from a building on Spokane’s South Hill, filed the settlement Wednesday in U.S. District Court for Eastern Washington.

Delanoy had been charged by the FTC with duping consumers by creating Web-based pop-up ads that claimed users had spyware on their computers. Spyware is software that loads itself onto machines and can track online behavior or send personal information to others.

Those users were urged to fight spyware by purchasing, for around $29, the Spyware Assassin product. But consumers and the FTC both complained to Delanoy, saying Spyware Assassin didn’t do what it promised.

In the settlement Delanoy did not acknowledge any wrongdoing.

Delanoy could not be reached for comment.

FTC attorney J. Ronald Brooke, based in Washington, D.C., said the settlement allows MaxTheater to continue doing business but the company cannot sell any products offering solutions for spyware.

Brooke said it’s not clear who will get the $76,000 from the settlement.

“We’ll try to figure out if we can easily find people who should receive compensation” for purchases of Spyware Assassin, he said. He could not estimate the number of people who might qualify for relief.

One step involves asking Delanoy to submit company records of sales and complaints from buyers of his products, said Brooke.

A number of consumer complaints in 2004 produced an investigation by the FTC that led to the complaint being filed in February 2005.

If money is left over, the FTC could use some for public information directed at helping online consumers avoid similar practices, said Brooke. Any leftover money could be deposited in the government’s general treasury, he said.